Tuesday, June 10, 2014

Chat-roomers used a 1954.25 target to get short yesterday two ticks from the intraday high. The futures' subsequent fall of 9 points from the top was worth as much as $460 per contract, but it would appear those who took the trade exited before day's end using the impulse leg-based stop-loss I'd suggested.  If anyone stayed short, please let me know in the chat room and I'll provide tracking guidance.  Early Tuesday morning, it was not impossible to know for certain whether the top will survive. The futures were in a correction that projected to 1942.00 (see inset), contingent on the breach of a midpoint Hidden Pivot support at 1946.50. Night owls can bottom-fish that last number with a 1946.50 bid and a  1945.75 stop-loss. There is one more Hidden Pivot above -- an unfulfilled target of major degree where we could try shorting again if this vehicle takes flight. I'm not going to publicize it here, but it was made available by email request last week, and so you can ask around in the chat room for the precise pivot.  A three-tick stop-loss would ordinarily be appropriate, but you can widen it to suit your style, since this target has the potential to become a major top. _______ UPDATE (10:05 a.m.): The futures went all headless chicken on the opening bell, but the fact that they dipped below my bottom-fishing number overnight implies the underlying theme today will be more weakness. _______ UPDATE (10:49 a.m.):  Since a subscriber in the chat room has reported staying short from yesterday, I'll provide a tracking position for his guidance and the guidance of anyone else still in the trade. For now, I'll suggest an ILBSL (impulse leg-based stop-loss), using the 15-minute chart. That would imply that the rally from the headless-chicken low

Predictably, GM's huge recall problem has elicited a gusher of humanitarian concern from the tort bar.  It would be fitting justice if they wind up owning the company, or perhaps the carcass that's left after they've pursued claims for economic damages (including declines in resale values), injuries and deaths.  These are the same major-league entrepreneurial litigators guys who took took down Toyota and the tobacco companies, so there's cause for concern over whether GM will even survive.  Are there any hints of mortality in the resurrected GM's stock charts? Looking at the weekly bars (see inset), there's a good case that GM shares are in a topping pattern that began nearly a year ago.  I don't put much store in head-and-shoulder tops because they are everywhere a chartist might want to find them, but in this case there's a graceful symmetry to the pattern that's difficult to ignore. From the standpoint of Hidden Pivot analysis, bulls and bears are in a duel that would tip in favor of the former were the stock to rally above early March's 38.05 peak. That's just $2 above the recent highs, and therefore easily plausible. This would seem to suggest that investors have not yet thrown in the towel.  Perhaps their tune will change once the lawsuits get rolling. As of now, however, the jury is not only not out, it has not yet been selected.  In the meantime, I'd set a screen alert at 31.12, since a print down at that price would generate a bearish impulse leg on the weekly chart, telegraphing a likely death spiral.